Social media ad revenues to reach $9.2B by 2016, fueled by mobile

Social media advertising revenues across the U.S. are poised to increase from $4.6 billion in 2012 to $9.2 billion in 2016, buoyed by dramatic growth in the mobile segment, according to a new forecast issued by advisory firm BIA/Kelsey.

Social-mobile ad revenues will triple from $500 million this year to $1.5 billion in 2016, representing a compound annual growth rate of 28.5 percent, BIA/Kelsey said. The firm credits the expected growth to catalysts like rapid social-mobile consumer usage growth, aggressive vendor experimentation and deeper integration of native ad units across the mobile platform.

In addition to mobile, BIA/Kelsey cites the emergence of native efforts like Facebook's (NASDAQ:FB) Sponsored Stories and Twitter's Promoted Tweets as the biggest driver behind social media advertising's future growth. Defining native social advertising as "branded content integrated within a social network experience (e.g., the newsfeed or content stream)," the firm projects spending will grow from $1.5 billion in 2012 to $3.9 billion in 2016, translating to a CAGR of 26 percent.

Despite the advent of new social media advertising alternatives, established vehicles like Facebook's Marketplace Ads and YouTube's multiple display units (e.g., video and banners) will continue to account for the highest percentage of revenues throughout the forecast period. Advertiser spending on social display advertising will increase from $3 billion in 2012 to $5.4 billion in 2016, a CAGR of 15.2 percent.

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